GlossaryEN1 min readUpdated: Jun 13, 2026

Incoterms Taxable Place of Performance

The taxable place of performance is determined exclusively by applicable VAT or sales tax legislation, not by Incoterms.

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Last updated: 13 June 2026Published: 27 January 2026

Source: https://iccwbo.org/resources-for-business/incoterms-rules/

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Definition & Explanation

The taxable place of performance is determined exclusively by applicable VAT or sales tax legislation, not by Incoterms. It designates the location where a supply of goods or services is deemed to occur for tax purposes—and this location determines which jurisdiction has the right to levy tax and which party bears reporting obligations. A common misconception in international trade is assuming that an Incoterm (such as FCA or DDP) automatically defines the taxable place of performance; this is factually incorrect. For B2B supplies within the EU, the place of performance may differ from the physical point of handover due to reverse-charge mechanisms.

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Incoterms Taxable Place of Performance

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Related Terms

DAP import clearance

Delivered at Place (DAP)

Place of unloading

breach of the obligation to place at disposal / placement breach

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DPU (Delivered at Place Unloaded)

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